Thursday 30th of April 2009
Increasing concern over the ability to repay debts has been cited as a potential cause of a drop in unsecured loans.
The Finance and Leasing Association (FLA) revealed that this form of lending was down 45 per cent in February, compared with a year earlier.
And the organisation suggested that this has come as a result of a reluctance to borrow, as well as lenders’ worries that rising unemployment means consumers will be unable to repay.
Those who have taken out unsecured loans but are finding it difficult to keep on top of them have a range of solutions available to them. These include debt management plans - informal agreements with creditors that can lead to more affordable payments being made.
Commenting on the new figures, chief economist at the FLA Geraldine Kilkelly said: "Rising unemployment and low consumer confidence have led to a further drop in unsecured loan new business in the last two months."
Meanwhile, moneysupermarket.com has found that it is becoming increasingly expensive to consolidate debts, with interest rates on these types of loan having risen over the last year.
- Debt consolidation loans falling, figures show
- Britons 'changing attitudes' towards debt management
- Homeowners 'more concerned with debt management'
- Low interest rate 'contributing to debt management efforts'
- Debt management growing in importance, survey finds
- Late credit card payments 'costing people dear'
